Does My Insurance Cover Falling Satellites?

What happens when a piece of NASA equipment lands on your house.

NASA's Upper Atmosphere Research Satellite is likely to fall back to Earth on Friday. The space agency says 26 pieces, some weighing hundreds of pounds, may survive the heat of re-entry and reach the ground intact. The satellite chunks probably won't strike a person or a building, but, if one did, would the government pay for the damage?

Probably. If the satellite causes damage to persons or property in other countries, the Convention on International Liability for Damage Caused by Space Objects (PDF) obligates the U.S. government to pay for it. The convention would have applied, for example, if the Skylab space research station—which was much heavier than the UARS satellite—had inflicted any damage when it scattered across the Australian outback in 1979. The convention does not apply to injuries inflicted upon U.S. nationals or their property, and NASA has not officially declared that it would cover damages. Most observers, however, are confident that the government would voluntarily pay the bill.

In the unlikely event that NASA were to contest liability and force a victim to haul them into court, a lawsuit against the government would face uncertain odds. No falling satellite has ever injured a person or inflicted significant damage on property, so U.S. courts are yet to rule on the issue. (A woman was struck by space debris in 1997, but she compared the force of the impact to being tapped on the shoulder.) First, the government might assert immunity. It's immune from tort suits over accidents in Antarctica, and space is similar to Antarctica, in that both are regions outside the United States with no government. This argument, however, might be a reach, since both the injury and the act of negligence would have occurred on solid ground.

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If the plaintiff could overcome the immunity claim, he would have to show that NASA was negligent, meaning that the agency could have taken reasonable precautions to prevent the accident. It's unclear whether the agency could have constructed a satellite that would break up more thoroughly on re-entry or not re-enter at all, and what those alterations would have cost.

If Uncle Sam were to stiff the victim, and a court didn't side with him, his homeowner's insurance policy would likely cover damage to his dwelling. A State Farm homeowner's insurance policy, for example, covers "falling objects," a category that includes meteors and spacecraft. Auto coverage depends on the policy. Comprehensive insurance would cover satellite damage, while collision and lesser forms of insurance would not.

NASA might consider space insurance the next time a satellite comes down. Companies and governments often take out insurance against harm to their satellite during launch or orbit. They can add third-party liability to cover damage their spacecraft might cause on re-entry, or get a free-standing liability policy. A few weeks before the space station Mir came crashing down in 2001, for example, the Russian government took out approximately $200 million in insurance. (Mir weighed about 23 times as much as the UARS satellite.) If NASA wanted coverage, it would have to work through a broker to cobble together offers from a few companies, since no individual space insurance company could offer a policy of that size. It would likely run Uncle Sam somewhere in the hundreds of thousands of dollars for Mir-like coverage. Locking in coverage early can lower the price.